A cargo ship is seen crossing through the New Suez Canal in Ismailia, Egypt, in this file photo dated July 25, 2015. Egypt has been struggling to revive its economy since a 2011 uprising toppled autocrat Hosni Mubarak, causing political and economic turmoil that deterred foreign investors and tourists and put a strain on the country’s foreign reserves.

Reuters
Cairo


Egypt’s economy is set to grow at a steady pace of 4.3% this financial year and the following two years, only marginally higher than the previous year and short of the government’s growth expectations, a Reuters poll showed yesterday.
Egypt has been struggling to revive its economy since a 2011 uprising toppled autocrat Hosni Mubarak, causing political and economic turmoil that deterred foreign investors and tourists and put a strain on the country’s foreign reserves.
Foreign reserves fell from $36bn in 2011 down to $16.3bn in September, enough to cover just over three months worth of imports.
The government said the economy grew around 4.2% last year and its 2015-16 budget projects growth of 5% for the financial year ending June 30.
A previous Reuters poll, published on August 20, showed analysts expected Egypt to grow by 4.3% in the year ending June 2016, and forecasted a growth of 4.5% and 5% in the following two years.
The central bank has been trying to balance the need for economic growth while keeping inflation risks at bay. It has kept its key interest rates unchanged for five consecutive central bank policy meetings.
Analysts polled by Reuters expect the central bank to lower its overnight lending rate to 9.0% this year, from the current rate of 9.75%. They expect the rate to be raised the following year to 9.25% and remain steady the following year.
Before the 2011 uprising, the economy grew about 7% annually for several years, but even that pace was barely enough to produce work for the large number of Egyptian youths entering the job market.
Egyptians voted yesterday in what one newspaper called a parliamentary “election without voters”, the low turnout highlighting growing disillusionment since the army seized power in 2013 and promised to restore democracy and growth. Younger Egyptians, who make up the majority of the population, were virtually absent.
Inflation rates in Egypt had been easing before September, reaching their lowest levels in more than two years in August and raising speculation that the central bank would cut rates to stimulate investments.
Urban consumer inflation however jumped to 9.2% in September from 7.9% in August on higher food prices while core inflation, which excludes items such as fruit and vegetables, continued its drop to 5.55% in September from 5.61% in August.
Analysts polled by Reuters lowered their inflation forecast to 10.1% for the financial year ending June 2016 from 10.4% in the previous poll. They expect it to ease further by June 2017 to 9.5% before it rises again to 10.4% the following year.